CNBC interviewed people in Uganda and Kenya regarding their dealings with Sam Altman's Worldcoin.Kenyan government authorities have forbidden the usage of Worldcoin's technology and raided the firm's Nairobi office as part of an investigation into the project.Various other nations including Argentina, France, Germany and the U.K. have declared their own investigations into the workings of Worldcoin.
For the past year, Keneth Byarugaba has been employed by Worldcoin in Uganda. His responsibilities are to promote the idea of scanning the eyeball into a large metallic orb for approximately $60 worth of cryptocurrency.Runners make money by commission depending on the amount of Ugandan people they attract to register with the new digital identity called World ID. Byarugaba commented that his ability for connecting with strangers was honed when he used to drive for Uber.Recruiting him involved going through a few processes. Of the 500 candidates, only around 200 passed the blockchain and marketing tests. The mission of Worldcoin is to make it a popular household name in Uganda.Byarugaba and the other recruiters emphasize the advantages of entering the digital economy with a single iris scan. These include universal basic income, online banking and a virtual currency for making payments.It has been successful, since Worldcoin reported two million two hundred thousand sign-ups since its soft launch in late 2021, with the end goal of achieving two billion users. Though government officials are anxious because of the biometric enrollment method and potential violations of local data safety regulations, some people are wary of the intense marketing linked with the product."The way it was being advertised made it look like a scam," Namureba Abel articulated, who has been working in the crypto field for the past decade. Abel, who is employed at Yellow Card, the largest centralized crypto exchange on the African continent, is usually a great supporter of tech trends in the digital asset industry."What caused me to hesitate was the marketing style and the large amount of individuals signing up without prior education," he continued. "They were practically everywhere in the malls of Kampala."
When Muvya Muthama visited a shopping mall in Nairobi, Kenya at the end of July, he was taken aback by the line of people eager to receive their 25 Worldcoin "WLD" tokens - a free sign-up bonus given in exchange for scanning their eyes into the orb. Muthama, an employee of Yellow Card, decided to investigate. After asking on-site representatives about the arrangement, he took a few hours to read up on Worldcoin's white paper. He followed this up with some research on the firm's mission regarding collecting biometric data, and concluded that it all seemed "a bit too dystopian".
Peter Mwangi enrolled in Worldcoin in May, months before the project's official launch. According to him, only 10 people were in line when he signed up. However, this changed drastically by the launch - reports surfaced of lines with thousands of Kenyans wanting to acquire a World ID and its associated free money.
Mwangi and Muthama both voiced the same concern: an incentive to sign up without fully understanding the terms and conditions of the app. Mwangi further noted that the Worldcoin Orb operators in Nairobi barely explained anything.
CNBC reached out to Worldcoin for comment on Mwangi's experience, but the organization did not respond.
Worldcoin, reportedly valued at $3 billion following its most recent funding round, is making big promises while striving to sign up the global population for a new, decentralized form of identity. This is known as proof-of-personhood, which entails validating each individual's identity through biometric capture and linking it to a blockchain address. Dubbed World ID, the platform enables users to securely access websites without having to give away any personal information, while remaining untraceable by governments or other organizations - Worldcoin does not "want to know who you are, just that you are unique."Okta, a digital identity management company with a market capitalization of $11.5 billion, is among the foremost adopters, having allowed users to log in with World ID since June. Additionally, social media app Discord also uses the platform for verification. Worldcoin hopes to make World ID applicable to banking, e-commerce, voting and more.The feature of self-custody is also very important, as Ava Labs President John Wu explains to CNBC. According to him, privacy, digital identity and self-sovereignty are "big themes in all of the world, not just in web3."Founded by Sam Altman, the man behind OpenAI and ChatGPT, Worldcoin is an effort to counter the issues caused by the advancement of AI-based tools that have made it easier to create deep fakes.The Worldcoin white paper proposes that "custom biometric hardware" is the only long-term feasible solution to issue AI-safe verifications, proposing the use of the iris. To that end, the Worldcoin Orb employs multispectral sensors to scan and recognize this uniquely human pattern in order to assign a World ID, proving that its holder isn't a bot.Since the launch three days ago, there are already 1,500 orbs deployed in more than 20 countries spanning five continents, with one person getting verified every eight seconds.
The concept of a financial network based on a monopolistic currency accessed through the eyeball may sound like a tale from a dystopian world, but Worldcoin's pop-up locations don't bring to mind any spooky imagery. The process of collecting biometric data to confirm identity is similar to the scans that Clear does at the airport and to Apple's facial recognition system, Face ID. Worldcoin utilizes a cryptography-based, privacy-preserving technique known as zero-knowledge proofs to keep the biometric data from being linked to the identifier. According to CEO Alex Blania, the system is "fundamentally privacy-preserving" with the iris code being the only thing leaving the orb. Additionally, Worldcoin's white paper states that all images are "promptly deleted" following sign-up, unless the user specifically opts into Data Custody.
CEO of digital asset trading platform Bittrex Global Oliver Linch believes that data protection is at the core of Worldcoin's design. He says that the founders are trying to "move the conversation on how we secure access" and ensure that the people accessing their online personas are real. Privacy safeguards are also a part of the pitch to Ugandans. Byarugaba explains that the system is encrypted and no information can be accessed, as it is a "zero-knowledge identity".
Still, participants must trust that Worldcoin has properly implemented the technology used to shield the biometric data captured and that basic security hygiene is followed. Vulnerabilities have already been exposed in some places, according to media reports. In May, a black market for iris data reportedly sprang up in China, with prices as low as $30. Meanwhile, the WLD token has dropped 80% to $1.45, with just over 126.7 million coins in circulation.
Some governments have begun to take action against Worldcoin, with Kenya suspending the project and conducting a larger investigation. Other countries have announced inquiries into the firm's business model due to privacy concerns. When asked about the project's privacy measures, Worldcoin responded that it complies with all regulations and has implemented privacy-centric design.
Despite the project's high-profile backers, not all inspire confidence. Notable investors include Blockchain Capital, Andreessen Horowitz, Coinbase, and LinkedIn co-founder Reid Hoffman. However, the Series C funding round was also backed by fallen industry titans such as failed crypto hedge fund Three Arrows Capital and Sam Bankman-Fried, former FTX CEO and now incarcerated suspect in a criminal trial.
Kenya has taken measures to restrict the use of Worldcoin, despite having a complicated stance on crypto. Although no regulating framework is in place, the finance ministry has proposed a 3% tax on the transfer of digital assets in next year's budget. Nonetheless, Worldcoin participants in Kenya and Uganda believe that the World ID and WLD token offer a great deal of utility. Mwangi, a Worldcoin user from Kenya, chose to join the project due to his admiration of the project's mission, which is to help protect people from being cheated out of their money when trading crypto.
In Uganda, Byarugaba has highlighted the advantages of the WLD token, such as its use as a medium of exchange and for global remittances, accessing decentralized finance loans and paying bills. CNBC has not yet verified these claims. Most users, however, seem to be converting their WLD tokens into fiat currency.
Byarugaba does not receive payment in the WLD token, instead he is given a daily sum in Ugandan shillings via mobile money, which does not require a smartphone and can be used to for purchases and bill payments through text message. The daily sum is deducted from his gross monthly pay, with the remainder given to him.
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